34. A bank's derivative trading desk decides to replace their long-standing Value at Risk (VaR) model, which is considered overly conservative. The existing model employs a historical simulation approach using a 3-year data window with equal weighting assigned to each day. In response, a quantitative analyst develops a new VaR model using the delta-normal method, which calculates volatilities and correlations over a 4-year period utilizing the RiskMetrics Exponentially Weighted Moving Average (EWMA) technique.

For a thorough comparison, both the existing and new models are run concurrently for 6 weeks to compute the 1-day 99% VaR. Throughout this period, the new model does not report any exceedances and consistently produces lower VaR estimates than the old model. The analyst argues that the lack of exceedances indicates the new model's accuracy and urges the bank's model evaluation team to approve it. Following an expedited review by a junior analyst, which contrasts with the standard comprehensive evaluation process that normally spans several weeks and involves a senior team member, the evaluation team approves the new model for use by the trading desk.

Which of the following statements accurately summarizes the outcome of this model replacement?